If you have millions of dollars behind your new product idea then you probably don’t need to read what I have to say. But, if you are like I was, working capital is tight, deadlines are tight, and mistakes will kill your foray into the product world.
When I hear people talk about low-volume manufacturing the normal buzz phrases are design flexibility, saving money, bridge manufacturing and speed to market. All points are very valid and can be explored in-depth for their own merits. But for this example of winning with low-volume manufacturing, I want to talk about how low-volume manufacturing generates revenue.
Because generating revenue is everything. Generating revenue is how you stay in control of your project. Generating revenue is what keeps stress away and the creativity flowing. Generating revenue is the validation of your project and added valuation to your company.
When it comes to launching a new product I have learned from past mistakes, I had some wins, I had some losses, but in the end, I always won with low-volume manufacturing. The biggest lesson I learned with low-volume manufacturing is that I will gladly accept a slightly higher per unit price for not having to purchase full production tooling in the early days. Also, I will always sacrifice a little spread-sheet profit for real-world early days profit. Smaller quantities are easier to sell to retailer/distributors. Smaller quantities are easier to store. Smaller quantities can easily be sold through online channels, which can yield much higher per piece profit margins. Early sales with low-volume manufacturing generates revenue, that revenue funds next-gen products or more production runs, both of which generate revenue without completely depleting your capital.
Every product situation is different, every retailer/distributors needs are different, but I have found that embracing low-volume manufacturing is a less stressful way to manufacture and a very sustainable new product launch model. Generate revenue early, and win.
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